ITO, WARD-1, Amaravati V. SHAILENDRA GOWARDHANDAS AGRAWAL, PARATWADA

ITA 21/NAG/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1696 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 16-01-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Keywords: Rejection of books of accounts
• Section: 143(3); 10; 2; 11

Judgement Text

1 ITA NO.21/NAG/2014 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T.A. NO. 21 /NAG/2014 ASSESSMENT YEAR S: 20 10 - 11 . THE INCOME - TAX OFFICER, SHAILENDRA GOWARDHANDAS AGRAWAL, WARD - 1, AMRAVATI. V/S. PROP. M/S SHANTI INDUSTRIES, KHAPARDE PLOT, PARATWADA - 4 44805. PANAASPA7183L. APPELLANT. RESPONDENT. APPELLANT BY : SHRI NARENDRA KANE. RESPONDENT BY : SHRI K.P. DEWANI. DATE OF HEARING : 13 - 08 - 2015 DATE OF PRONOUNCEMENT : 28 TH AUGUST, 2015 O R D E R PER MUKUL K. SHRAWAT, J.M. . THIS IS AN APPEAL FILED BY THE REVENUE ARISING FROM THE ORDER OF LEARNED CIT(APPEALS) - II, NAGPUR DATED 07 - 10 - 2013. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS : 1. WHETH ER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION OF ` .34,75,710/ - ON ACCOUNT OF ESTIMATION OF INCOME FROM TIMBER BUSINESS WITHOUT APPRECIATING THAT ASSESSEE BEING A SELLER, THE PROVISIONS OF SECTION 206C ARE APPLICABLE. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) HAS ERRED IN DELETING THE REJECTION OF BOOKS OF ACCOUNTS U/S 2 ITA NO.21/NAG/2014 145(3) OF THE ACT AND ES TIMATION OF COMMISSION INCOME @ 1% WITHOUT APPRECIATING THE FINDING MADE BY THE AO IN THE ASSESSMENT ORDER. 2. AT THE OUTSET WE HAVE BEEN INFORMED THAT THE ISSUE RAISED BY THE REVENUE DEPARTMENT HAS ALREADY BEEN DECIDED IN FAVOUR OF THIS VERY ASSESSEE BY ITAT, NAGPUR BENCH VIDE AN ORDER DATED 27 - 05 - 2015 (ITA NO. 285&286/NAG/2013 TITLED AS ITO V/S. SHRI SHAILENDRA GOWARDHANDAS AGRAWAL, ASSESSMENT YEARS : 2008 - 09 AND 2009 - 10). AN ASSESSMENT WA S MADE FOR ASSESSMENT YEAR 2010 - 11 UNDER SECTION 143(3) DATED 30 TH OF NOVEMBER, 2012 AND THE ASSESSEE WAS HELD RESPONSIBLE FOR COLLECTION OF TCS IN VIEW OF THE PROVISIONS OF SECTION 206C OF I.T. ACT. IN THE PAST AS WELL THE ADDITION WAS MADE IN THE HANDS OF THE ASSESSEE ON IDENTICAL FACTS. AN APPEAL WAS FILED AGAINST THE ADDITIONS MADE BY THE ASSESSING OFFICER. WHILE DECIDING THE APPEAL, LEARNED CIT(APPEALS) HAS ALSO MENTIONED THAT IN ASSESSMENT YEARS 2008 - 09 AND 2009 - 10 ON IDENTICAL FACTS A VIEW WAS TAKEN IN FAVOUR OF THE ASSESSEE. SINCE THE R EVENUE AUTHORITIES HAV E PROCEEDED FOR THE YEAR UNDER CONSIDERATION ON THE SAME LINES AS PROCEEDED IN THE PAST YEARS, THEREFORE, THE PARTIES BEFORE US HAS INFORMED THAT THE ISSUE IS NOW COVERED BY THE ORDER OF ITAT, NAGPUR REFERRED SUPRA. 3. ON PERUSAL OF THE ORDERS OF THE AUTH ORITIES BELOW AND CONSIDERING THE FACTS OF THE CASE, WE DEEM IT PROPER TO FOLLOW THE AFOREMENTIONED ORDER OF THE RESPECTED COORDINATE BENCH WHEREIN IT WAS FINALLY HELD AS UNDER : 6. UPON CAREFUL CONSIDERATION, WE FIND THAT LEARNED CIT(A) IN THIS CASE HAS MADE AN OBSERVATION THAT ASSESSING OFFICER HAS NOT BEEN ABLE TO PROPERLY APPRECIATE THE ACCOUNTS OF THE ASSESSEE. HE HAS OBSERVED THAT, ACCORDING TO THE ASSESSING OFFICER ASSESSEE COLLECTS ` .127 (INCLUDING TCS+ SC & CESS) FROM THE PURCHASERS AND DE POSITS THE SAME WITH THE DISTRICT FOREST OFFICER (DFO). THE LEARNED CIT(A) FOUND THAT THIS IS A BASIC FLAW IN THE ARGUMENT 3 ITA NO.21/NAG/2014 OF THE ASSESSING OFFICER. THAT THE ASSESSEE DOES NOT COLLECT THIS AMOUNT FROM THE PURCHASERS. THAT THIS FIGURE IS PURCHASE PRICE O F THE ASSESSEE AND IS THE AMOUNT WHICH THE ASSESSEE GIVES TO THE DFO. THE LEARNED CIT(A) HAS ACCEPTED THAT WHAT IS COLLECTED FROM THE PURCHASER IS A SALE PRICE WHICH IS 112.50 AND IT DOES NOT INCLUDE TCS. WE FIND THAT, IN THIS CASE, IT HAS BEEN ACCEPTE D BY THE LEARNED COUNSEL OF THE ASSESSEE THAT ASSESSEE IS BASICALLY EARNING COMMISSION INCOME. HE HAS TO LEND HIS NAME AS IN THESE TENDERS OF FOREST DEPARTMENT IT IS NECESSARY TO HAVE A PERSON OF REGIONAL ORIGIN. THE CONTENTION THAT THE ASSESSEE PAY ` . 127 TO THE DFO BUT COLLECTS ONLY ` . 112.50 FROM THE PURCHASER DEFIES LOGIC. IN OUR CONSIDERED OPINION, THE LEARNED CIT(A) SHOULD HAVE GIVEN THE ASSESSING OFFICER AN OPPORTUNITY TO EXPLAIN HIS APPRECIATION OF THE BOOKS. HOWEVER, THE LEARNED CIT(A) HAS ACCEPTED THE CLAIM OF THE ASSESSEE THAT ASSESSEE ONLY COLLECTS SALE PRICE OF 112.50 FROM THE PURCHASER. IN OUR CONSIDERED OPINION, THIS ASPECT ALSO NEEDS TO BE EXAMINED FROM THE POINT OF VIEW OF PREPONDERANCE OF PROBABILITY AS TO WHY ASSESSEE SHOULD BE SO CHARITABLE TO THE PURCHASER. MOREOVER IN VIEW OF THE ACTUAL NATURE OF ASSESSEES BUSINESS, WHICH HAS BEEN ADMITTED AS TIMBER COMMISSION, THE DIFFERENCE BETWEEN COMMISSION ACCRUING & THAT REFLECTED IN THE TRADING ACCOUNT NEEDS TO BE EXPLAINED AND EXA MINED. 7. IN OUR CONSIDERED OPINION, THE ISSUE NEEDS A FRESH EXAMINATION ON THE LEVEL OF THE ASSESSING OFFICER. ACCORDINGLY, WE SET ASIDE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER. ASSESSING OFFICER IS DIRECTED TO CONSIDER THE ISSUE AFRESH. THE A SSESSEE IS ALSO DIRECTED TO PROPERLY EXPLAIN TO THE ASSESSING OFFICER AS TO WHAT EXACTLY IS THE NATURE OF HIS BUSINESS AND SYSTEM OF ACCOUNTING. ACCORDINGLY, THESE APPEALS ARE REMITTED TO THE FILES OF THE ASSESSING OFFICER. 8. IN THE RESULT, REVENUES APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. 4. ON THE SAME LINES THE ISSUE IS RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER TO BE DECIDED AS PER THE DIRECTIONS STATED HEREIN ABOVE. THE GROUNDS OF THE REVENUE MAY BE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 4 ITA NO.21/NAG/2014 5. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28 TH DAY OF AUGUST, 2015. SD/ - SD / - (SHAMIM YAHYA) (MUKUL K. SHRAWAT) ACCOUNTANT MEMBER. JUDICIAL MEMBER NAGPUR, DATED: 28 TH AUGUST, 2015. COPY OF ORDER FORWARDED TO : 1. THE ASSESSEE. 2. REVENUE. 3. THE CIT(A) 4. THE CIT, NAGPUR. 5. THE D.R., ITAT, NAGPUR. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, NAGPUR WAKODE